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High Tobacco Taxes Spark Huge Black Market in Northeast
Breitbart ^ | 6 Jan 2014 | Mike Flynn

Posted on 01/07/2014 6:18:03 AM PST by Hoodat

High-cigarette tax jurisdictions are losing out on up to $729 million in tax revenue each year due to illicit trade in tobacco products.

That is according to a new study from the nonprofit research organization RTI International. The figure represents an upper-end estimate of aggregate revenue foregone by the cities of Boston, Philadelphia, New York, Providence and Washington, DC. All five are top destinations for cigarette smugglers seeking to take advantage of high cigarette tax rates that push economy-minded buyers, including underage smokers seeking to avoid high, legal prices, to the black market.

In New York, which boasts the highest cigarette tax in the nation, the market in illicit cigarettes is vast.

According to a 2013 study by the Tax Foundation, about 60 percent of cigarettes sold in New York are smuggled.

A previous 2011 study conducted by the lead researcher in the RTI study indicated that in New York City, specifically, up to 42 percent of cigarettes were smuggled into the city from lower tax jurisdictions.

Most cigarettes sold on the black market in New York appear to originate from lower-tax Virginia.

Late last year, New York City established by law a minimum price of $10.50 per pack, which some observers believe could further fuel the illicit trade problem. At the time of the study the average price per pack in New York City was about $8.

While some policy experts . . .

(Excerpt) Read more at breitbart.com ...


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events; US: New York; US: Virginia
KEYWORDS: cigarettes; invisiblehand; taxes; tobacco; tobaccotax
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To: Hoodat

I am here in New York and besides smuggling there is another way. I am not sure of the details but I think pipe tobacco is not taxed at the same rate as cigarette tobacco. A carton costs about 80 to 90 bucks of brand name butts. There are two places around me that sell cartons for 40 bucks. You pick your tobacco and they load it into a rolling machine and you sit there and place them in a carton. The cigarettes don’t seem to have all the chemicals of brand names but they are just as good and it’s pure tobacco, sort of healthy free range smokes at half the cost.


61 posted on 01/07/2014 10:28:52 AM PST by shoff (Vote Democratic it beats thinking!)
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To: shoff

The large Rolling Machines are now illegal since 2013...when the tobacco company’s fought owners of these machines since so many people were changing over from store bought brands..... The tobacco industry claimed the businesses who had these machines were ‘manufacturing’ cigarettes....Tobacco Comany’s won the case and all these machines have been removed or stored from these businesses.

You can still buy the roll your own machines, but businesses that roll them for you are now illegal.

A couple of people at work roll their own now, using pipe tobacco, and say it costs them about $20 for the tobacco.... which includes the tube costs....gives them ‘3 plus cartoons’. Saving thousands a year they said.

They both claim the first thing they noticed was they stopped coughing mornings....supposedly because there are no chemicals in the tobacco they use.


62 posted on 01/07/2014 10:47:44 AM PST by caww
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To: Theodore R.
Odd, considering that New Englanders love big government, paying taxes, and socialist programs.

No, we don't.

63 posted on 01/07/2014 11:02:57 AM PST by DTogo (High time to bring back The Sons of Liberty !!)
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To: JRandomFreeper

“I’ll be planting 200 for the spring. This one just showed up, and I’ve let it live, mainly for grins.”

200!!!

OK. Now I’ll ask the punchline question: do you even smoke?


64 posted on 01/07/2014 1:25:46 PM PST by RKBA Democrat (Having some small say in who gets to hold the whip doesn't make you any less a slave.)
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To: RKBA Democrat
Yep. Without supporting organized crime the goverment.

Legal as church on Sunday, if I produce for my own use and don't sell it.

No extra chemicals, no pesticides, no tax man... all of which are dangerous.

/johnny

65 posted on 01/07/2014 1:33:12 PM PST by JRandomFreeper (Gone Galt)
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To: JRandomFreeper

I half expected you to say you didn’t even smoke :-)

How much tobacco does one plant produce? How difficult is it to grow? It looks like a fancy cabbage to me.

I don’t smoke, but I have half a mind to someday start growing and curing. Just so I can give it away. I like so-called “sin” taxes about as much as I like gun control...

...and I really don’t like gun control.


66 posted on 01/07/2014 1:54:31 PM PST by RKBA Democrat (Having some small say in who gets to hold the whip doesn't make you any less a slave.)
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To: RKBA Democrat
200 plants, with losses from weather, insects, etc.... should give me between 12 and 24 pounds of cured tobacco. That's a year's supply for me at 1 lb per month.

It's not hard to grow. Tobacco hornworms love it, so I squish them twice a day to keep from using pesticides.

I overplant everything to ensure I get what I need. If I have a good year, great. If I have a crappy year, at least I get something. Except last year, when tomatoes bombed on me.

/johnny

67 posted on 01/07/2014 2:00:17 PM PST by JRandomFreeper (Gone Galt)
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To: JRandomFreeper

Have you tried dusting with dipel? Dipel is about the only thing I can use on my garden (I’m a beekeeper). It’s a bacteria that kills all sorts of caterpillars. Non-toxic to humans and bees. It washes off just fine.

Wow on the tobacco crop. Is curing it all that difficult?


68 posted on 01/07/2014 2:27:09 PM PST by RKBA Democrat (Having some small say in who gets to hold the whip doesn't make you any less a slave.)
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To: RKBA Democrat
Haven't tried it. I may this year. Mashing the hornworms works, too.

Curing is a chore, and takes lots of room and time.

Since I'm single, I strung paracord near the ceiling all over the house, and hang my tobacco inside.

Most married men couldn't get away with that. ;)

/johnny

69 posted on 01/07/2014 2:30:36 PM PST by JRandomFreeper (Gone Galt)
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To: JRandomFreeper

Dipel works well on tomato hornworms and pretty much any caterpillar type bugs. It’s apparently works on tobacco worms too. I don’t mind squashing, but it takes time I don’t have.

I doubt I’d get away with curing tobacco inside. But I get away with the beehives, the brewing, and plenty of other quirks and hobbies so I can’t complain.


70 posted on 01/07/2014 2:39:31 PM PST by RKBA Democrat (Having some small say in who gets to hold the whip doesn't make you any less a slave.)
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To: JRandomFreeper

Does curing the leaves emit an odor inside your house?

Can a dehydrator be used? (I’m sure this will magnify the tobacco scent! )


71 posted on 01/07/2014 9:18:40 PM PST by 1_Rain_Drop
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To: JRandomFreeper

I had my husband put hooks in the ceilings of our spare bedroom and the crafting room. They are about 2 feet from the walls and cover both ceilings with the same spacing for maximum coverage. In the fall, tobacco leaves are hanging in both rooms. I have to crouch a little to get something out of the rooms. ;) Tobacco grows fine in northern Idaho. We smoke outside, have for decades. We did not want our children, and now grandsons, to “smoke” too.

Btw, according to the insurance tables, I gain one year of life, from the estimated 93 years to 94 years. Great-grandma was almost 100, grandma and great-aunt, too. Both smoked.

I had surgery a few years ago. I lied on the form. The Dr was amazed at how fast and well I healed. That was when I told him the truth. The last check-up with another Dr she said my lungs and breathing capacity was excellent. I told her I grow my own. She said the studies do not cover those who smoke “clean” tobasco. The US companies have been putting additives in for many decades.
I want a pipe in case tubes become a problem.


72 posted on 01/07/2014 9:33:59 PM PST by hearthwench (Mom, NaNa, always ornery)
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To: caww

The place I go to has two of these large roiling machines. They add tobacco and place in tubes and you roll your own by putting the finished product back into the box the tubes came from.


73 posted on 01/08/2014 4:46:38 AM PST by shoff (Vote Democratic it beats thinking!)
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To: 1_Rain_Drop
No odor. A dehydrator shouldn't be used, it will set the 'green' and the tobacco will taste terrible. Curing is about controlling the drying.

/johnny

74 posted on 01/08/2014 5:37:39 AM PST by JRandomFreeper (Gone Galt)
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To: hearthwench
I've got a pipe I've had for years, but tubes haven't been a problem, yet.

I know about having to crouch to get through a room with leaves hanging. When the leaves are almost 2 ft long, they hang down pretty low.

/johnny

75 posted on 01/08/2014 6:28:10 AM PST by JRandomFreeper (Gone Galt)
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To: shoff

Understand..but they are doing so illegally if they are running them. The business who had these running in my area now has removed them altogether.

I understand for a time the machines were simply not used as the Tobacco Companies were being opposed in the courts by the business people who had these operating in their stores. But once the Tobacco companies won, (last year) all large rolling machines had to be removed.


76 posted on 01/08/2014 11:27:26 AM PST by caww
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To: All
I switched over to filtered little cigars a while ago. Tastes like a cigarette use to. This is my favorite brand I can get for less than $10.00 a carton online.

And I just starting to experiment with E-Cigs now.

Screw you Mr. Revenuer.

77 posted on 01/08/2014 11:37:55 AM PST by McGruff (I stand with Phil.)
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To: JRandomFreeper

Thanks!
I guess I failed tobacco 101.
I plan to grow my own this summer so I best start studying.


78 posted on 01/08/2014 4:08:31 PM PST by 1_Rain_Drop
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To: caww

Very interesting. Thanks for the info. It did surprise me they could even open that type of business. I’ll see how long they can stay open.


79 posted on 01/09/2014 11:17:55 AM PST by shoff (Vote Democratic it beats thinking!)
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To: shoff
new regulations make it incredibly difficult to continue operating the RYO machines, particularly the requirement to obtain a manufacturer’s license....the tobacco companies claims were that these businesses were “Manufacturing cigarettes with these machines”...

....but at the heart of it was raising tax's on pipe tobacco equivalent to cigarette tobacco. Congress more than doubled the federal excise tax on cigarettes, and, to bring RYO tobacco in line with packaged smokes, raised the tax on RYO tobacco from $1.10 a pound to $24.78 a pound....how long could any stay in business with just the increase in tax....not to mention getting manufacturing license's and all the regulations to meet a manufacturing company.

In this the tobacco company fared very well as most had to go out of business as they were mom and pop businesses. Without the machines and the increase in tax's they couldn't afford to remain open...not to mention putting people out of work.

Government, along with the tobacco Industries demands..put the little guys out of business...in order for them to gain the tax revenues and stop the competition which indeed was taking business from the big cigarette companies.

80 posted on 01/09/2014 1:21:20 PM PST by caww
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